Crypto transactions of 700 investors under income tax lens, likely to face 30% tax, penalty

 







Tax sleuths have reportedly zeroed in on about 700 investors for high-value crypto transactions, and the income tax (I-T) department is now planning to send notices to them.


Income-tax officials mentioned most of these cases involved investors who have either avoided mention of virtual digital assets gains in tax returns or haven’t filed returns at all. Plus, these high net worth individuals (HNIs), non-resident Indians (NRIs) or entities, including startups, are likely to face 30 per cent tax, penalty and interest, according to a report in ET.


“We have a long list of people transacting in crypto assets but were not paying tax. Initially, (we) have shortlisted about 700 transactions, where tax liability is very high,” the financial daily quoted a senior Central Board of Direct Taxation (CBDT) official as saying.


More importantly, the list includes students and housewives who have never filed returns. The I-T department is also investigating whether their names had been used to dodge the tax net.


Worth mentioning here is that the government proposed a tax of 30 per cent on income from cryptocurrencies like Bitcoin and Ethereum and other digital assets in the Budget 2022-23. However, Finance Minister Nirmala Sitharaman had added that losses from the sale of digital assets cannot be offset against other income.


Citing officials, the publication mentioned there are instances where gains were more than Rs 40 lakh, yet the investor has either not filed returns or filed returns with zero income.


Separately, CBDT chairman JB Mohapatra last month told the daily many investors in cryptocurrency had not been declaring income and the tax department has gathered adequate on them. Adding that the department will initiate action after March 31.


Apart from imposing fines under the new regulations for virtual digital as announced in the Budget 2022-23, the tax department may also seek penalties, which may go up to 50 per cent over and above the tax.
Source:https://www.timesnownews.com/business-economy/industry/crypto-transactions-of-700-investors-under-income-tax-lens-likely-to-face-30-tax-penalty-article-90214280


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